Oil Spill

In a victory for BP, 5th Circuit tells judge to re-evaluate oil-spill payout formula

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Workers try to collect oil-covered sand in Pensacola
Beach, Fla. Cheryl Casey / Shutterstock.com

BP’s complaints that undeserving claimants were winning oil-spill payouts will get a new look as a result of a federal appeals court ruling.

The New Orleans-based 5th U.S. Circuit Court of Appeals on Wednesday ordered a lower court judge to reconsider the formula used to measure potential economic loss suffered by oil-spill victims, the New York Times reports. BP had alleged the claims administrator was misinterpreting its settlement with victims of the 2010 Gulf oil spill, resulting in an overly generous payout formula that paid some people who had no losses.

How Appealing links to the 2-1 decision (PDF) and to other press coverage.

“The district court had no authority to approve the settlement of a class that included members that had not sustained losses at all, or had sustained losses unrelated to the oil spill as BP alleges,” the appeals court said. “If the administrator is interpreting the settlement to include such claimants, the settlement is unlawful.”

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